The EU’s taxonomy regulation aims to reorient capital flows towards a more sustainable economy. A unified classification system should enable investors to distinguish between activities that contribute significantly to a sustainable economy and those that do not, and to invest accordingly.
The current proposal for a “green taxonomy”, published in March by the European Commission’s Technical Expert group, sets thresholds and establishes minimum criteria for sustainable activities within most economic sectors.
Human rights must also be respected if an activity is to be sustainable. That is why Finance Watch Member Südwind Institute proposes a “Social Taxonomy”: What human rights risks lie dormant in the EU taxonomy? What are the fundamental differences between social and environmental criteria? And: what would a “social taxonomy” look like that identifies those activities that are of particularly high social value?